Impact to offer up Younghusband as development play

Impact Investment Group is readying to offload the Younghusband commercial precinct in Melbourne’s inner northwestern suburb of Kensington.

The Younghusband precinct in Melbourne’s Kensington.

Impact Investment Group is readying to offload the Younghusband commercial precinct in Melbourne’s inner northwestern suburb of Kensington that could sustain a $500m development.

The move comes as the city’s commercial real estate sector has been dented by Covid-19, and Impact, a pioneer in green investing, has undertaken a strategic review of its projects and the broader market.

Real estate firm Charter Keck Cramer and former NAB chief Andrew Thorburn – a part-time executive with Impact – also provided advice.

The former NAB chief executive has separately teamed up with former Macquarie banker Michael Traill, who set up For Purpose Investment Partners last year, and is readying to raise a $250m investment vehicle.

Impact’s head of funds management, real estate, Darren Brusnahan, said that despite the strong foundations the company laid at the heritage site, “given the changed environment, we believe an institutional investor a private sector investor with offshore ­financing is likely to be better placed to realise the vision for Younghusband”.

“In putting the property on the market through an expressions of interest campaign we anticipate there may be alternative proposals, such as joint ventures, and we will examine all proposals on their merits,” he said.

“Younghusband is a significant strategic site that is benefiting from significant investment in road and rail – its long-term ­potential remains strong.”

Younghusband is a 100-year-old wool store, spanning almost two inner-city blocks, and will be pitched as an opportunity for developers keen to build out the project near Kensington train station.

Impact picked up the Younghusband building in 2016 and the funds manager backed by the Liberman family has since been working up plans for that would see the two 19th-century brick buildings complemented by a new co-working warehousing space.

The developer paid $30.25m for the 1.5ha historic site on Elizabeth St in 2016, and could double its entry price but the real opportunity is for a new party to come in, win a tenant and overhaul the ­precinct.

The buildings span 29,168sq m and Impact has proposed a precinct spread across four warehouse levels and the two neighbouring properties. Younghusband would have a village atmosphere with an activated laneway, communal green space and high quality workspaces.

Impact put in place plans to rejuvenate the precinct into an “industrial village” beginning with the heritage red-brick woolstore, taking a light touch, restoring the existing bricks, steel and wood.

The planning permit is based on a plan for high environmental performance and the development would be both carbon and water neutral.

Cushman & Wakefield’s Richard Butler and Leigh Melbourne will tap interest from local and offshore investors as Impact considers either an outright sale or partnership.